Billboard Gets Snarky; Not A Believer In CwF + RtB

from the doesn't-make-it-right dept

On my flight to Midem a week or so back, I ended up seated next to Billboard editor Bill Werde. We had quite an enjoyable conversation about the music industry and business models. We didn't agree on everything, but we seemed to view the general issues from a similar point of view (i.e., we both think it's important to make sure that content creators get paid -- we just disagreed on what was likely the best way for that to happen). We talked a few more times during the course of the event and the whole thing was quite cordial. So, I have to admit a bit of disappointment at what seems like an attack piece from Billboard entitled "CwF+RtB = WTF?" in response to my recent post discussing many of the business models that are working for musicians these days. I'll take the blame here, and assume that I wasn't clear in some of the points on my post, leading to the attack by writer Antony Bruno (who I don't believe I've ever met or spoken to), which hopefully I can clarify here.

Masnick's basic premise is that record labels and publishers charge digital services too much for licensing content, such that they generate few users and eventually go out of business. He says they are too concerned with getting a fee for every use of their music (stream or download). And in doing so they are stifling music discovery and ignoring other ways to monetize music.

Well, that's not my basic premise at all -- which is much more focused on how individual content creators can make more money, despite the state of the industry today. However, it is true that, separate from that, I do believe that many of the established middlemen have set up a system that hurts many useful services. If you speak to those who once worked at any number of digital music services who were squeezed by the labels and publishers and no longer exist (imeem and Ruckus, to name two, though there are plenty more -- such as Spotify's inability to launch in the US is clearly due to this issue), I don't think this particular point is controversial or even refutable.

Meanwhile, as these efforts have contributed little to the bottom line, Masnick points to the example of nine artists who have eschewed this route and - without any label assistance - give away their music to draw attention to other unique products.

This is simply not accurate. Some of the artist did, in fact, have label assistance. I have never been against labels, at all. I am just in favor of more reasonable business models that involve a proactive decision by fans to support an artist. Also, not all of the musicians profiled chose to give away their music (though, I tend to think that the models where the artists do encourage that kind of thing work better). The idea of highlighting a few examples of artists who did it on their own, as well as those who were part of a label, was to show that this wasn't a pro-label/anti-label sort of thing. I apologize if that point wasn't clear, but Bruno's summary is not accurate.

They're about better connecting with the fans and then offering them a real, scarce, unique reason to buy -- such that in the end, everyone is happy. Fans get what they want at a price they want, and the musicians and labels make money as well. It's about recognizing that the music itself can enhance the value of everything else, whether it's shows, access or merchandise, and that letting fans share music can help increase the market and find more fans willing to buy compelling offerings. It's about recognizing that even when the music is shared freely, there are business models that work wonders.

The above I agree with entirely. This is basically a good summary of what I put forth. No disagreements here.

However while some artists have replaced the income gained through selling music with income gained from selling other products (such as music in different formats, concert tickets, merch and interaction), doing so is not the future of the music business. Yes, artists and labels need to find new, unique products that both better monetize the superfan and draw into the fold more casual ones as well. It's a good strategy. But it's no reason to stop pursuing licensing deals or ignore music copyrights, as Masnick suggests.

To be clear, I never suggested that anyone stop pursuing licensing deals. My concern over licensing was from the perspective of the various services, and the idea that there is some magnificent new licensing plan that will save the music industry. There isn't. Basic economics ought to tell you so, as you look at what it would take for a universal licensing fee to make the kind of money that the old guard thinks it deserves, and then do the math on who pays it and how it works, you'll quickly realize that it doesn't work. It's a red herring. It's the pot o' gold at the end of the rainbow that a bunch of folks are looking for and they'll never find. But, sure -- if musicians want to pursue licensing deals, more power to them. I say the same thing about trying to sell their music as well. If they can, more power to them, but it's not going to make a difference for almost all musicians, who will see so little from those kinds of deals as to be pointless. Instead, if they focus on their own business models, rather than relying on third party license groups, they're more likely to find success. Don't rely on the collection society fairy. Build a real business model.

The first problem with this argument is that not all artists can make money selling products other than music. The way some of the artists Masnick cites look for new revenue is a bit unsettling. Really, who wants to spend the day at Disneyworld with the kind of fan who pays $10,000 for the opportunity? And is selling off clothes and equipment really a model for aspiring artists?

If Billboard had sent a reporter to my session at Midem, they would have heard me respond to this. No one says that every musician needs to spend a day at Disneyland with a superfan as part of their business model. In fact, I said exactly the opposite. What I've said repeatedly is that part of what makes these models work is if they fit with that musician and the unique personality of that musician. My whole session was a workshop where we picked specific musicians and figured out ways that they could craft unique models that worked for them. I even made it clear in that session that the "go to Disneyland" package was the sort of thing that really worked for Josh Freese because of a close connection he, personally, had to Disneyland (his first gig was playing in the band there, and his father worked at Disneyland). It's the sort of thing that fits with Josh's personality, but no one else's. And that's what makes it special. Which was the point. And, yes, Josh actually did want to spend the day with that kind of fan, as was covered in the press coverage of the fan who did pay.

As for "unsettling," well, again, I'm a bit perplexed. If it was "unsettling" why did Josh Freese propose it? It clearly was not unsettling or he wouldn't have brought it up in the first place. If it's unsettling to other content creators, then they should focus on plans that are more "settling." And despite what Bruno claims, yes, all good artists have things other than music to sell. We've yet to find a single example of one who does not have something else to sell -- but if he has an example of someone who can't sell anything but music, we'd like to hear about it.

Some artists are better at self-marketing and promotion than others. Yet plenty of artists in both camps make music that's worth hearing. It's all well and good for artists who can't get or don't want a label deal to use this model to make a living.

Bruno seems to be confusing two separate things here. Again, we never said that musicians should ditch a label. In fact, some of the examples we used were label musicians (as stated above). And, we never said that musicians had to focus on self-marketing and self-promotion. In fact, we had a detailed post just recently about artists who don't want to do those things and how they can still take advantage of these types of business models. In fact, at the session I did at Midem, we even worked on some business model ideas for artists who specifically like to remain aloof from their audience, and we were overflowing with ideas.

But some artists simply want to make music and sell, and they shouldn't be branded as archaic or naive for feeling that way.

Why not? Look, some people just want to build and sell typewriters, and there's absolutely nothing wrong with that. But they shouldn't then complain when people aren't interested in buying the typewriters (or if it's a much smaller market than what it used to be). And they shouldn't be upset when they are branded as archaic because they're trying to sell something in a market that has moved on. Again, there's nothing wrong if a musician wants to sell music, but they shouldn't go running and complaining to the government that they need special new licenses or monopoly rights when there are plenty of business models open to them if they were just willing to adapt.

Second, the nine artists Masnick cites to support his theory are the exception, not the rule.

If there were any support for this claim, I'd like to see it, because I have yet to see any evidence of this whatsoever. First of all, ever since we first started writing about artists that have figured this out, we've been told that each example was an exception. The first artists were up-and-coming artists, and we were told that it only would work for up-and-coming artists, but not for big-time stars. Fine. Then we showed it working with big-time stars, and we were told that it would only work for big-time stars, and not up-and-coming artists. So we showed both together, and someone said "okay, maybe it works for up-and-coming artists and big-time stars, but no one in between." The reason that I chose the nine artists in that list that I wrote about was because they cover the spectrum all across the board from no name up-and-comers to big-stars and the middle class in-between. There are a lot more than nine such stories, and, as I told Bill during our conversation on the airplane, we receive so many examples of artists making this work that I don't write about most of them any more because it's not news. And that's because it's not the exception, it's the rule.

Furthermore, almost all of these examples came about in just the last two years or so. Given the way the system used to work, it definitely took a while for musicians to figure out ways to embrace and use these models to the fullest. And it's really only in the last few years that the tools for artists to connect directly with their fans have really reached the stage to make all of this viable. Given that, it's really quite stunning just how many musicians are making this work already. Claiming that this model is the exception rather than the rule sounds suspiciously like the horse buggy makers insisting that no one will buy automobiles because they're too noisy and smelly and they break down a lot.

Masnick is cherrypicking examples of artists who have followed his formula to success through research and asking his readers of his blog to send in examples. What he's not done is print a similar list of artists who have tried and failed under the same model.

How does one prove a negative? Despite what Bruno seems to be implying here, we have never claimed that this model is the sure fire way to success in the industry. Lots of musicians could put together this type of model and fail for a very good reason: they're just not that good. Lots of musicians never make a living because they're not very good and couldn't make a living no matter what the business model is. But that's rather meaningless isn't it? What would a list of failures show? All we're concerned with is helping content creators who want to make money understand the best ways to do so. Nothing Bruno says refutes that or explains why it doesn't work. And given how many artists are making this work, it's difficult to see what point he's driving at, other than he doesn't like what I have to say for some reason.

Thirdly, let's take a look at the part where he says music licensing schemes "make it less likely for fans to support bands directly, because the money is going elsewhere." It's a confusing statement that to me suggests the opinion that fans will only pay for an artist's products when all of the proceeds go to the artist rather than shared with a label. I find that very difficult to believe, and challenge Masnick to either present proof that this is the case beyond a small minority of copyleft and anti-label fanatics, or clarify the statement further.

I discussed this point at great length with Werde, and have written about it in great detail. It has nothing to do with, as Bruno suggests, that fans won't pay an artist if the money isn't going directly to them at all, and I apologize if that's what Bruno believed I implied. The point is that if everyone is forced into paying some sort of compulsory license, then a huge chunk of disposable income that would have gone directly to artists is now diverted into a giant bureaucracy that will not be nearly as efficient in paying those artists. Studies have shown that the amount of disposable income that consumers are paying for things in the music ecosystem has remained about the same (or maybe gone up slightly) over the last few years. But if there's a collective licensing scheme that takes $10 month from everyone, that's $120 per year of disposable income that automatically goes into the inefficient bureaucracy, rather than towards what a fan specifically chooses to spend the money on. It doesn't mean fans will stop spending elsewhere, but it shrinks the amount they will spend directly on bands, and that's my worry with those schemes. If we let the market sort this out, then fans get to make their decisions directly, and the content creators who adapt will do just fine. If we let some sort of collective licensing scheme come in, then we've distorted the market and the system will get gamed. This harms many musicians, though it may help some politically-anointed middlemen. I'd rather help musicians than middlemen, and I'd rather let the market decide, rather than any sort of mandatory or forced licensing system.

While connecting with fans and giving them unique products to buy is sound advice, there's no reason to throw the baby out with the bathwater. Masnick and the TechDirt blog is a staunch opponent of almost any plan to monetize not only music, but almost any other type of copyrighted content. That includes any blanket music licensing plan for ISPs (which he calls a "music tax ") and journalism paywalls, among other things.

This is such a misrepresentation of my position that I would ask that Billboard append a correction/retraction on it. I have no opposition to monetizing content. Perhaps Bruno did not read my post carefully, but I am very much in favor of helping content creators make money. But the problem is that the basic economics of the situation suggest that doing so directly by trying to sell something that is abundantly available is just not a very good business. My opposition to things like a music tax or journalism paywalls has absolutely nothing to do with being "an opponent of any plan to monetize... copyrighted content." It's because I don't think those plans will work and I think they do more harm than good. And with both the music tax and with journalism paywalls I have gone to great lengths to explain why -- not that Bruno shared any of those reasons.

Which brings me to my last point. My problem is not just with Masnick's formula (at least not all of it) but with the way Masnick goes about promoting it. It's agenda journalism. Any example that rises up to support his theory is treated as gospel; anything that pokes holes in it is dismissed as heresy (or outright ignored). Those challenging his conclusions wind up getting flamed in the comments section of the blog, as I'm sure many will do to this post here.

This is also a rather bizarre complaint as I am not a journalist and have never claimed to be a journalist. I'm sorry if Bruno wants to pretend I am one just to claim I am a bad journalist, but I really don't see the point. Yes, I have an opinion. So shoot me. And, it's also incorrect to claim that we treat examples in support as "gospel" and then "dismiss as heresy" anything that pokes holes in it. That's simply not true. If Bruno could point me to a single post where I "dismissed as heresy" proof that I was wrong, I would appreciate it. That would be incredibly counterproductive, as the goal here is to help content creators. Why would we ever want to ignore useful information about things that don't work? In fact, just recently, we had a very productive discussion about an effort to fund an album this way that failed. We looked at why it failed and ways to fix it. It wasn't that the model itself doesn't work (there's tons of evidence to the contrary at this point), but that it wasn't implemented well. Despite Bruno's claims that we don't discuss failures, we do, and we try to learn from them.

Masnick's formula is designed as a rationale for eliminating copyright protections and licensing laws. It's a tactic in his broader goal of copyright "reform." Now I believe there is a case for copyright reform as well, but not to the degree Masnick and his followers do (I'll save that for another post).

No, actually, the formula is designed for one reason and one reason only: to help content creators better deal with changing and turbulent times in order to help them make money and avoid making bad business model decisions. Separately, I do think they point to reasons why we don't need to ratchet up copyright and licensing laws to an even more draconian level, but I've seen nothing Bruno has to say that counters that.

Now I can't fault a reporter for trying to make a buck in these trying media times, but some become so personally invested in the viability of their theories that they are no longer able to take an objective viewpoint on their reporting. Masnick is doing the same here, making what he writes more about proving himself and his theory right than about exploring the nuances of the marketplace. It's just an easier sell.

Again, not a journalist. Again, always willing to explore nuances -- and have done so regularly. Unfortunately, there were none presented here to explore. I will note that throughout this whole post, at no point did Bruno explain why the model I discuss doesn't work. He just doesn't seem to like the fact that I've received some attention for it.

The music industry - and by that I include every element of the industry including labels, publishers, managers, artists, lawyers, etc. - is facing serious challenges. These challenges require serious thought, with rational consideration of all sides of an issue free of any ideology, not some catchy formula designed to promote an individual person or point of view.

Indeed. But the formula was never intended to promote me or any point of view. In fact, I had been really weary of using that "formula" in the first place. Honestly, the only reason I put it forth originally was because, years ago, when I presented my nuanced explanations of the economics at play, I was told that it was too complicated for an industry that wanted a simple formula. So I then put together a simple starter formula, hoping that it would help drive people into the more nuanced discussion, and what happens? Billboard attacks me for being too simplistic. Apparently, I can't win.

Also, the claim that I'm some agenda journalist pushing this formula to get myself attention is so ridiculous to anyone who actually knows me. I used the formula once and had no intention of even mentioning again, but it really resonated with many people (though, apparently not Antony Bruno), and so I kept getting asked about it, and asked to speak about it and to help content creators make use of it that I finally realized (against my initial feelings) that it was useful to a lot of people. I'm not sure why I need to apologize because people find it useful or for how it suddenly becomes me grandstanding. I'm sorry that people found it useful?

In the end, I guess I'm a bit confused about this writeup at Billboard. It doesn't present a single shred of evidence as to what I said that was wrong. At times it misrepresents my position, but mostly it seems that the writer just doesn't like that I'm getting attention for it.

Luckily, Bruno's view is actually not the view of many people in the industry. One of the nice things I learned at Midem was that there are lots of folks in this industry who are interested in understanding this model and who are talking to us to better understand how it works (nuance and all!). It's really too bad, because it's publications like Billboard that should be leading this discussion, not some random technology/business/policy blog.

Reader Comments

I notice your views have been static clear and confident for some years Mike.... but not so confident that you would put your own money where your mouth is and transform the music industry yourself, I guess it's safer to make your money just blogging.